annual report...2009 opic annual report page 4 guaranties and underwriting political risk insurance...

ANNUAL REPORT

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INTRODUCTION 2

COmmITTED TO TRANsPARENCy 6

sUPPORTINg smALL bUsINEss 8

PROmOTINg sUsTAINAbILITy 10

INvEsTINg IN AfghANIsTAN 12

bELIEvINg IN ThE mIDDLE EAsT 14

fOCUs ON AfRICA 16

INvEsTmENT ACTIvITIEs 18

OPIC COUNTRIEs AND AREAs 25

fINANCIAL sTATEmENTs 26

tAblE of contEnts

2009 OPIC annual rePOrtPAGE2

introduction

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It is in times of economic uncertainty that the role

of the Overseas Private Investment Corporation

becomes even more relevant and important. As the

primary government agency supporting U.s. private

sector investment overseas, OPIC is playing a critical

role by helping U.s. businesses during a time of

severe retrenchment and global uncertainty. As an

international development agency and an instrument

of U.s. foreign policy, OPIC management and staff

worked tirelessly in 2009 to address the global

challenges confronting the United states.

To support the President’s initiative, announced at

the summit of the Americas, to “create a broader

foundation for prosperity that builds new markets

and powers new growth for all peoples in the

[Western] hemisphere,” OPIC partnered with the

Inter-American Investment Corporation and the

Inter-American Development bank’s multilateral

Investment fund to establish the new microfinance

growth fund. secretary of the Treasury Timothy

geithner specifically commended OPIC for helping the

Administration to restart lending to Latin American

and Caribbean micro and small businesses and for

the agency’s “timely support in turning this concept

into reality.”

When President Obama announced in Cairo that

the United states would launch a new fund “to

support technological development in muslim-

majority countries, and to help transfer ideas to the

marketplace so they can create more jobs,” he was

speaking of the OPIC-financed global Technology

and Innovation fund, to be seeded with $25 million

to $150 million in OPIC capital. The fund is part of

a larger call for proposals that could ultimately

result in multiple new investment funds that support

technological growth.

And to help U.s. businesses, particularly small

businesses, continue to grow through overseas

investment even in a time of shrinking credit and

political volatility, OPIC expanded its outreach efforts.

OPIC served as a collaborating partner for several

important conferences, including working with the

California-based Center for International Trade

Development to support the pioneering Renewable

Energies in Emerging markets conference in san

francisco. OPIC also organized two workshops

targeting minority and women-owned small

businesses. The result of these efforts was that

business plan summaries submitted for initial

consideration for OPIC’s smE financing were up 150

percent over the same period in 2008.

Wherever and whenever U.s. private capital and

enterprise can support U.s. policy and help to

realize an Administration’s vision, OPIC is there

to make it happen.

OPIC is an independent U.s. government agency

whose mission is to mobilize and facilitate the

participation of U.s. private capital and skills in the

economic and social development of less-developed

countries, and countries in transition from non-market

to market economies. more importantly, there is no

other program in the U.s. government or the private

sector with a developmental purpose and tools equal

to those of OPIC.

OPIC helps U.s. enterprises participate in overseas

markets by making direct loans, issuing loan

oPic: EvEn MorE rElEvAnt And iMPortAnt


guaranties and underwriting political risk insurance

for developmental projects, and by establishing and

investing in private equity funds created to finance

projects in specific regions, markets or sectors. since

OPIC does not compete with the private sector, OPIC

support is unnecessary for projects that can be

privately financed or insured.

but in uncertain times and in challenging markets,

private capital can be difficult to obtain, if it is available

at all. OPIC’s readiness to provide support has often

been the deciding factor in determining whether

certain investments even take place. The private

sector, in turn, works with OPIC, helping the agency to

channel private investment into areas that are most in

need, supporting host countries’ development and our

nation’s foreign policy priorities.

And make no mistake, supporting economic

development in the world’s emerging economies is

central to U.s. international objectives. At the g-20

summit in Pittsburgh, President Obama expressed the

U.s. commitment to work with all developed nations

to build new markets and help the world’s most

vulnerable citizens climb out of poverty. The President

also called for “a new era of engagement that yields

real results for our people -- an era when nations live

up to their responsibilities, and act on behalf of our

shared security and prosperity.”

It was a founding principle of OPIC in 1971 that private

investment is a powerful catalyst for engagement,

economic growth and poverty reduction. by focusing

on private investment, OPIC demonstrates that

entrepreneurial initiative and national economic

development are not mutually exclusive. Indeed, they

are mutually beneficial. In the agency’s 38-year

history, OPIC has supported $188 billion worth of

investments that have helped developing countries to

generate over 830,000 host-country jobs. The very

prospect of these investments, and the OPIC support

that made them possible, have contributed to the

development of free market reforms and democratic

institutions on which further investment, opportunity

and personal liberty depend. OPIC investments have

also supported $72 billion in U.s. exports and more

than 273,000 American jobs.

by charging market-based fees for its products,

OPIC operates on a self-sustaining basis, at no net

cost to the American taxpayer. Through prudent risk

management, OPIC has accumulated reserves of

over $5 billion. In sum, OPIC is an effective tool for

responsible economic development, and a good deal

for the American taxpayer.

but with limited resources and just over 200

employees, OPIC must, of necessity, be highly

selective in the projects it chooses to support each

year. The agency is obligated to ensure that its

projects confer on host communities as many

positive developmental benefits as possible. Ideally,

they should also provide a platform for subsequent

economic growth.

Projects receiving OPIC support in 2009 demonstrated

the many and varied ways that the agency can fulfill

its developmental mission. New OPIC-supported

projects will develop host countries’ physical

infrastructure by expanding electric power capacity

or rebuilding war ravaged cities. Other projects are

designed to strengthen financial infrastructures at

the national, local or micro-financing level. OPIC is

promoting development of human capital by funding

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the construction of elementary and secondary schools

and supporting projects that provide technical training

and professional jobs. And OPIC-supported projects

are helping to meet basic human needs, by providing

clean water, healthy food and affordable housing.

because the earth’s resources are limited, OPIC

in 2009 extended its commitment to supporting

environmentally-sustainable development by

financing projects which make use of renewable

energy and green technologies. An OPIC loan helped

to construct a solar power plant in India that sells

clean, sustainably generated electricity to the grid.

Another outstanding example is a biomass project

that is converting waste rice husks into clean

electricity for thousands of Indian villagers who

currently rely on fossil fuel generators or who have no

power at all.

This project is also a great example of OPIC’s

successful outreach to and support of U.s. small

businesses. In this case the OPIC loan came about

because an agency officer directly contacted the

virginia-based company to offer support. Wider-

ranging outreach to the small business community

in 2009 included two more presentations of OPIC’s

successful Expanding horizons workshops, which

have now educated more than 1,000 minority and

women business owners across the United states

about OPIC products and services.

While OPIC continually strives to better fulfill its mission,

the agency recognizes that in an operational sense it can

always do better. One area in which OPIC was proud to

make improvement in 2009 was transparency.

In response to President Obama’s call for increased

openness and accountability in government decision-

making, OPIC implemented new transparency

measures that are opening to the public an

unprecedented breadth of information about OPIC-

supported projects and enabling more meaningful

public comment and participation in the OPIC decision-

making process. The OPIC board of Directors meeting

in september 2009 was the first ever at which detailed

information on the most environmentally- and socially-

sensitive proposed projects -- as well as summary

information on every project to be voted on by the

board -- was posted on the OPIC Web site at least five

weeks before the meeting. It is no overstatement to

say that OPIC is today operating more transparently

than it has since the agency’s founding.

OPIC’s success as an agency, of course, depends on

the success of its people. In that regard, OPIC is proud

to have placed second in a ranking of the best Places

to Work in the U.s. government among agencies

with fewer than 2,000 employees. OPIC has worked

hard to establish a workplace that is both welcoming

and challenging, one that equally values individual

performance and the sense of teamwork that is

necessary to execute complex projects in emerging

and developing economies.

As vice President biden said in helping to honor those

employees presented with service awards in 2009,

“The OPIC family is a testament to how commitment

and teamwork can mobilize U.s. private capital, help

support sustainable development in new markets

overseas and create jobs here in the United states.

The recipients of this award are a shining example

of how Americans willing to answer the call of public

service can truly improve our nation and help build a

stronger world.”


COmmItted tOtrAnsPArEncy

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because transparency in government is critical in

securing both fiscal accountability and public trust,

one of President Obama’s first acts in office was to call

on all federal agencies to open their decision-making

processes and increase public access to useful

information. OPIC responded by announcing new

transparency measures that make publicly available

an unprecedented volume and breadth of information

about OPIC-supported projects, and encourage a new

level of public involvement in their development.

OPIC now posts to the agency Web site brief

summaries of the most environmentally- or socially-

sensitive projects at least 60 days before making

a decision to support them. Detailed summaries for

all projects scheduled for board of Directors action

are posted at least five weeks in advance of board

meetings. summaries include information such as

project costs and potential environmental, social

and economic impacts; assessment standards

and mitigation measures; and where to obtain

environmental and social project information. Also

available now are summaries of the findings of third-

party audits and quarterly listings of sub-projects of

OPIC-supported investment funds.

Posting so much information so early increases public

participation by allowing OPIC to invite and consider

public comments. in advance of any decisions by

the board -- comments which are themselves also

posted on OPIC’s Web site. OPIC also announced that

it will publish an OPIC Environmental and social Policy

statement to replace its environmental handbook, last

updated in 2004.

These new measures build on transparency initiatives

of recent years in which OPIC had already enhanced

its internal due diligence procedures, encouraged

project sponsors to engage in meaningful, inclusive

and culturally appropriate consultation with

local stakeholders during all phases of project

development, and to require such consultation on

projects with significant social impacts.

The result of all these efforts is that today OPIC is

operating more transparently than at anytime in the

agency’s 38-year history.

MorE oPEn And AccountAblE tHAn EvEr

As do all of the world’s major international finance and development institutions, oPic recognizes its obligation to be accountable to the people affected by the projects it supports.

Putting action to this commitment, and following the guidance of congress, the oPic board of directors created an office of Accountability (oA) in 2005 to provide an independent forum where people affected by oPic-supported projects can voice and resolve problems and to help assure that oPic meets its own policy requirements concerning the environment, social impacts and worker and human rights. As an independent ombudsman and compliance review office, oA enhances oPic’s mission effectiveness by assuring affected communities and project sponsors alike that their complaints, concerns or requests for assistance will be handled with fairness, objectivity and transparency.

several measures were taken in 2009 to strengthen and enhance the office of Accountability. And in a four-year report on its activities, oA documented that it exists not just to handle problems, but to improve outcomes.

InstItutIOnalIzInG a meChanIsm Of aCCOuntabIlIty


suPPOrtInGsMAll businEss

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U.s. small businesses looking to participate in

the global marketplace may well see themselves

surrounded by insurmountable obstacles to potential

opportunities. OPIC brings those opportunities

within reach by providing eligible small businesses

with project financing and political risk insurance

generally not available to them through the private

markets. With affordable rates, flexible coverages

and streamlined approvals, OPIC’s approach to small

business is as innovative and entrepreneurial as the

businesses themselves. Projects approved for support

in 2009 again demonstrated the job-creating know-

how that U.s. small businesses bring to the world’s

developing economies.

for example, in Uganda, where only five percent of the

population has bank accounts, a U.s. small business

is using an OPIC loan to deploy transformational

financial infrastructure that will provide up to two

million unbanked citizens with access to state-of-the-

art banking services. In partnership with the national

government, mAPswitch Uganda is applying its

integrated biometric identification and mobile financial

technology to overcome the lack of access that

hampers economic progress in so many developing

countries.

georgian dairy operator sante gmT Products, which

used an OPIC loan in 2007 to establish new milk

collection centers, received a $10 million loan in 2009

to further expand collection, manufacturing, packaging

and distribution operations at what has become

georgia’s largest producer of dairy and juice products.

brinGinG u.s. EntrEPrEnEursHiP to tHE world

if any one constituency can be deemed a major beneficiary of oPic resources, support and outreach, it is u.s. small businesses. the growing Enterprise development network (Edn) and oPic Partners Program enlist outside organizations to improve the access of u.s. small and medium-sized enterprises to political risk insurance to help protect their investments and to the overseas financial support they often find difficult to obtain.

to increase opportunities for women- and minority-owned businesses, oPic in 2009 again offered its highly-successful Expanding Horizons workshops tailored especially for these entrepreneurs. workshops in boston and st. louis drew attendees from across the u.s. and as far away as England. this year’s events featured a new session about oPic support for renewable and clean energy technology projects, a new area of focus for the agency. More than 1,000 woman and minority business owners have now learned firsthand how oPic and other government agencies can help them compete overseas.

extendInG OPPOrtunItIes tO small busInesses


PrOmOtInGsustAinAbility

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With its focus on long-term development, OPIC works

to support projects that tie economic viability to a

sustainable economic future. Today, that often means

powering growth with alternative energies and newer,

cleaner technologies.

Acting on President Obama’s pledge of U.s. support

to increase economic opportunity and job creation

in muslim-majority countries, OPIC issued a call for

proposals to manage one or more private equity

investment funds that will promote the growth of

technology in the middle East, Asia and Africa. In

October 2009, OPIC also committed $100 million

to the new virgin green fund, one of six private

equity funds approved in september 2008 designed

to leverage $505 million of OPIC financing to

complement the fund’s investments in clean and

renewable energy projects worldwide.

To build awareness of the potential returns on

alternative energy investments, OPIC co-sponsored

the Renewable Energy in Emerging markets (REEm09)

conference with the Centers for International Trade

Development. Participants gathered in san francisco

to learn of the challenges, solutions and successes

in implementing and sustaining renewable energy

infrastructures in the developing world.

In addition to these global initiatives, OPIC reached

out on a personal level to U.s. entrepreneurs to help

them bring their solutions to waiting markets. After

reading how Charlottesville, virginia-based husk

Power systems (hPs) had brought electricity to five

rural villages in India using a biomass process fueled

by rice husks left over from milling, an OPIC senior

manager offered the company financing to expand

to hundreds of villages. hPs’s OPIC loan is funding

36 rice husk-powered generators, each serving a

village of about 600 households -- roughly 21,000

households in total, representing 110,000 people. for

many residents, the carbon-neutral energy will be

their first-time electricity or replacement of power

from more expensive diesel generators.

Another great example, also in India, is OPIC’s support

to Azure Power Punjab Ltd, also founded by a U.s.

entrepreneur. With a loan from OPIC the company

successfully constructed and is operating a 2 mW

photovoltaic solar power plant near the city of Amritsar

-- the first private megawatt-scale solar Independent

Power Plant in India selling clean, sustainably

generated electricity to the grid. The plant employs

advanced solar photovoltaic technology to power 4,000

rural homes, proving that it is possible to distribute

solar power generation at the tail end of the grid. It is

providing power to communities in rural India for the

first time and enhancing the lives of tens of thousands

of people.

invEstinG witH An EyE to tHE futurE

improving energy efficiency is critical to reducing worldwide emissions of greenhouse gases (GHG) and increasing global energy security.

demonstrating the Administration’s commitment to that goal, oPic settled a six-year lawsuit over climate change issues and reaffirmed its previously-announced intent to increase investment in clean energy projects and to reduce the greenhouse gas emissions in the projects it funds.

“between the new GHG initiative and more aggressive investment focus, oPic’s GHG emissions are capped and will go down, while positive investments in clean energy are skyrocketing,” wrote John d. sohn on the climate change insights blog of McKenna long & Aldridge. “it’s a great story that the obama Administration should let people know more about. oPic is quietly going about its business, turning a healthy profit for u.s. taxpayers, leveraging private sector capital and mitigating climate change.”

PrOmOtInG Green teChnOlOGIes


InVestInG InAfGHAnistAn

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genuine economic opportunity, fueled by private

investment, is one of the most powerful tools in

the struggle against international terrorism. Where

economic despair breeds support for extremist

organizations, economic opportunity can provide the

foundation for peace, hope and stability. but private

investment depends on investor confidence, a

requirement that can be hard to come by in nations

at the forefront of the effort to defeat extremism.

Enter OPIC. One of the first institutions to finance

projects in post-Taliban Afghanistan, OPIC in 2009

continued to provide loans, guaranties and political risk

insurance to support much-needed private investment

in this rebuilding and strategically-important nation.

OPIC sought out and established a relationship

with the Insurance Corporation of Afghanistan (ICA)

-- the only private commercial insurance company

in Afghanistan -- and approved a $15 million loan

for the company. Now, numerous direct, indirect,

and multiplier effects are expected from the loan. by

allowing ICA to issue more insurance, more quickly,

small- and medium-sized enterprises will have

increased access to essential financial products that

ultimately decrease both the uncertainty of operating

a business and potentially reduce the costs of doing

business. As a result, OPIC’s support will enable

these businesses to stay open and provide jobs. The

loan will also help to develop Afghanistan’s financial

services sector and improve corporate governance

through the introduction of best business practices

and adherence to international accounting standards.

A $2 million loan to sustainable Energy services

Afghanistan (sEsA) will finance the installation of

renewable wind and solar energy systems, plus local

or small-scale transmission and distribution systems,

which will deliver electricity to both rural and urban

areas. Consistent with U.s. and OPIC policy to expand

the economic opportunities for all segments of a host

country’s population, sEsA has developed a technical

training program designed specifically to include

women on the project’s technical and professional

staff. In large part because of the nation’s security

challenges, Afghanistan’s energy services market

remains widely undeveloped and limited to a small

number of companies -- making the confidence

generated by OPIC’s participation as important as the

power it will supply.

suPPortinG our nAtion’s strAtEGic obJEctivEs

oPic investments in Afghanistan demonstrate how the agency fulfills its mission to add value by making possible transactions which would be impossible or unlikely without oPic. this “additionality” is critical because without it, oPic would be crowding out private sector financing, insurance and investment. through additionality, oPic expands development by supporting unique investment projects.

oPic has had procedures in place since the beginning of this decade to ensure that each and every new project submitted for consideration is open to participation by private insurers, thereby complementing the private market rather than competing with it. Project sponsors must in fact first seek insurance from private insurance companies before they apply for oPic coverage.

enhanCInG PrIVate seCtOr CaPaCIty


bel IeVInG IntHE MiddlE EAst

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Throughout the middle East, OPIC support of

developmental projects advances U.s. policy, as

articulated by President Obama, to bring to the region

the benefits sought by people everywhere: an end

to terror, access to basic services, the opportunity to

live their dreams, and the security that can only come

with the rule of law.

OPIC-supported projects announced or committed

in 2009 included support for significant private

investment in the continuing reconstruction efforts

for two nations recovering from war. In Iraq, OPIC

will provide a direct loan and political risk insurance

to support the construction and operation of an

international business-class hotel. The project is

expected to generate positive foreign exchange

earnings as well as permanent well-paying jobs. In

Lebanon, OPIC has loaned $261 million to the nation’s

banking sector under two risk-sharing framework

agreements with Citibank. In 2009, OPIC signed a

new $34 million loan with byblos bank and provided

a $55 million guaranty for Citi’s lending to bank

Audi, both of which will support loans for small and

medium-sized enterprises, individual mortgages

and consumer finance. OPIC is also providing $7.5

million in political risk insurance to support the project.

supporting transparent institutions like bank Audi

increases the likelihood of positive project outcomes,

given the borrower’s support for community outreach

and service programs.

In another demonstration of its ability to encourage

private investment in this challenging region, OPIC

has agreed to reinsure the coverages provided to

U.s. investors by IgI Insurance Limited in Pakistan.

OPIC insurance support will expand the ability of

IgI Insurance, as well as the Pakistani insurance

sector more broadly, to provide coverage for political

violence, expropriation and currency inconvertibility in

a risky market. The non-profit International Executive

service Corps, an insurance originator in OPIC’s

Enterprise Development Network, helped bring this

relationship about by introducing IgI to OPIC and

facilitating discussions.

And OPIC loans totaling $250 million -- all under

the sponsorship of U.s.-based Chf International, a

nonprofit organization -- will enable three Jordanian

banks -- Cairo Amman bank, Arab bank Plc, and

housing bank for Trade and finance -- to expand

homeownership for low-income families, in support

of the National housing Initiative announced by

King Abdullah.

worKinG towArd A futurEs of PEAcE And stAbility

the provision of an adequate supply of water is one of the most important developmental challenges any nation faces. in a water-scarce country such as Jordan, it is especially difficult. oPic is helping Jordan to alleviate its water shortage through a $250 million investment guaranty and up to $150 million of political risk insurance to support the historic disi water conveyance Project.

the centerpiece of the $1 billion project being built by GAMA Energy A.s., a company owned by GAMA Holding A.s. and GE Energy financial services, is a 325-kilometer pipeline that will pump more than 100 million cubic meters of water a year from the disi aquifer in Mudawarra to the capital of Amman. it is the largest such privately-financed water project in the region.

PrImInG the deVelOPment PumP


fOCus OnAfricA

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global economic downturns are never welcome.

but in Africa, which had been steadily building

the foundations for higher growth, lower poverty

and economic reform, the financial crisis of 2009

overturned years of progress, swept away jobs,

revenues and livelihoods, and produced an 18-percent

drop in foreign direct investment.

Reversing that trend is much more than any one

nation or organization can do alone. That is why in

2009 OPIC forged important partnerships with African

and U.s. investment-related agencies and private

capital markets in order to encourage investment

and promote growth by increasing access to finance,

insurance and other services for the continent’s most

vulnerable sectors.

With $227 million in OPIC support, three new private

equity funds will leverage up to $680 million in

conventional and creative financing for medium-sized

businesses, pan-African companies and reform-

focused countries across the continent. moreover, OPIC

signed a new agreement with Africa’s only multilateral

investment and credit insurer -- the African Trade

Insurance Agency (ATI) to renew its cooperation and

to work together more closely to share information

about products and services, to consider opportunities

for reinsurance in Africa, and to work with ATI to build

enhanced capabilities and capacity in offering political

risk insurance. OPIC and ATI will soon begin reaching

out to companies and investors in Africa during a

business development tour and through technical

capacity-building efforts targeting African banks,

insurers and insurance brokers.

In Liberia, OPIC has provided financing to buchanan

Renewables for two investments in the renewable

energy sector. buchanan Renewables fuel received

a $15 million loan from OPIC to establish a business

harvesting wood chips from abundant and sustainable

rubber trees from plantations for export to biomass

power plants. OPIC also committed $111.7 million in

financing to buchanan Renewables monrovia Power to

build a 36 mW biomass power plant near monrovia to

be fueled by rubber wood chips. The biomass power

plant will have an enormous impact in a country that

currently has less than 10 mW of installed generation

capacity, using expensive diesel fuel.

brinGinG EconoMic GrowtH to A rEGion in nEEd

recognizing and reinforcing nearly two decades of working together to facilitate u.s. private sector investment in Africa, oPic presented its first-ever Partnership Award to the corporate council on Africa (ccA). Established in 1993, ccA works closely with governments, multilateral groups and business to improve Africa’s trade and investment climate, and to raise the profile of Africa in the u.s. business community.

“business linkages generated by the partnership between ccA and oPic have resulted in a significant number of investment opportunities for ccA members, which in turn have created economic growth throughout Africa. we look forward to continuing our close partnership with oPic, to the benefit of entrepreneurs across Africa,” said ccA President stephen Hayes in accepting the award.

oPic created the oPic Partnership Award in 2009 to recognize organizations for exceptional support and dedication in helping oPic to encourage American investment in emerging markets, by disseminating information about oPic products and services to their constituencies.

hOnOrInG a lOnG-standInG PartnershIP


InVestment

ActivitiEs

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2009 invEstMEnt ActivitiEs

Us sponsor/Insured Investor Project Name Project Description

afrICa and the mIddle east

AngolAChemonics International Chemonics Global program of emerging market technical

assistance contracts$812,603 Insurance

Tivannah USA, Inc. Tivannah Global, Lda Expansion of building materials manufacturing operation

$5,919,783 Finance

CAmeroonCitibank, N.A. Agence de Credit Pour l’Entreprise Priv* Expansion of microfinance portfolio $1,166,550 Finance

Congo, DemoCrAtiC republiC ofSeaboard Overseas Limited Minoterie de Matadi, S.A.R.L. Cargo handling facility $6,459,027 Insurance

ethiopiAChemonics International Chemonics Global program of emerging market technical


gAbonOverseas Development and Investment Company, Inc.

American Dream Home, S.C.I. Housing construction $990,000 Insurance

ghAnAChemonics International Chemonics Global program of emerging market technical


Microvest I, LP Sinapi Aba Trust Microfinance on-lending $1,000,000 InsuranceSandy Osei-Agyeman Slid Industries, Ltd Expansion of hair care manufacturing company $1,000,000 Finance

irAqDar Es Salaam Insurance Company Dar Es Salaam Insurance Company Facultative reinsurance for hotel $24,750,000 InsuranceDiana Dane Dajani Revocable Trust/Robert K. Kelley

Summit Hotels Limited/Summit Global Group International business-class hotel $50,000,000 Finance

Iraq Middle Market Development Foundation Iraq Middle Market Development Foundation Expansion of SME lending portfolio $19,000,000 Finance

isrAelCorporation Sole Episcopal Church of Jerusalem &

the Middle EastMixed-use building $4,500,000 Finance

JorDAnChemonics International Chemonics Global program of emerging market technical


CHF International Arab Bank PLC Origination of low-income mortgages $100,000,000 FinanceCHF International Cairo Amman Bank Origination of low-income mortgages $50,000,000 FinanceCHF International Housing Bank for Trade & Finance Origination of low-income mortgages $100,000,000 FinanceGeneral Electric Capital Corporation Disi Water PSC Water conveyance system $250,000,000 FinanceGeneral Electric Capital Corporation Disi Water PSC Water conveyance system $150,000,000 Insurance



KenyAChemonics International Chemonics Global program of emerging market technical


Citibank, N.A. Kenya Women Finance Trust Ltd* Expansion of microfinance portfolio $7,221,500 Finance

lebAnonCitibank N.A. Bank Audi Sal-Audi Saradar Group* Loans to SME’s/low & middle income mortgages/

consumer loans$55,000,000 Finance

Citibank, N.A. Byblos Bank SAL* Loans to SME’s/low & middle income mortgages/consumer loans

$34,000,000 Finance

National City Bank Bank Audi Sal-Audi Saradar Group Low and middle-income mortgages, SME and consumer loans

$7,500,000 Insurance

liberiABoard of Directors of AISM American International School of Monrovia Inc Renovation & expansion of K-8 grade school $1,600,000 FinanceChristopher Jorgensen & James Steele Buchanan Renewables (Monrovia) Power Inc 35 Megawatt rubber wood fired electric

generation facility$111,700,000 Finance

James Steele & Christopher Jorgensen Buchanan Renewables Fuel Inc Process of unproductive rubber trees into wood chips

$15,000,000 Finance

RLJ Companies, LLC RLJ Liberia, LLC Hotel construction and operation $9,260,000 FinanceRLJ Liberia US, LLC RLJ Liberia, LLC Hotel construction and operation $2,781,000 Insurance

mAliAmerican International School of Bamako Foundation

American International School of Bamako Expansion & relocation of Pre-K-12 school $6,800,000 Finance

moroCCoChemonics International Chemonics Global program of emerging market technical


mozAmbiqueChemonics International Chemonics Global program of emerging market technical


nigeriAChemonics International Chemonics Global program of emerging market technical


Citibank, N.A. American International School Lagos* Development & construction of new high school facility

$13,500,000 Finance

ContourGlobal Solutions North America LLC ContourGlobal Solutions (Nigeria) Ltd. Electric services $5,850,000 InsuranceEligible US Investors Capital Alliance Property Investment Co., LP Closed-end investment fund $50,000,000 Investment

Funds

south AfriCAAIG Global Emerging Markets Fund II LP Blue Financial Services Ltd. Finance expansion of SME loan portfolio $70,000,000 FinanceChemonics International Chemonics Global program of emerging market technical


tAnzAniAChemonics International Chemonics Global program of emerging market technical


togoContourGlobal LLC ContourGlobal Togo 100 MW power-generating facility $146,250,000 FinanceContourGlobal Togo LLC ContourGlobal Togo S.A. 100 MW power-generating facility $25,575,940 Insurance

ugAnDAMichael Landau/Eli Popack Mapswitch Uganda Ltd Expansion of financial-telecom services business $3,800,000 Finance

West bAnK AnD gAzAChemonics International Chemonics Global program of emerging market technical


Cooperative Housing Foundation AMAL-Bank of Palestine Mortgage Corp I Develop low & middle-income housing finance program

$59,690,000 Finance

Cooperative Housing Foundation AMAL-Bank of Palestine Mortgage Corp II Develop low & middle-income housing finance program

$99,490,000 Finance

Cooperative Housing Foundation AMAL-Cairo Amman Bank Mortgage Corp I Develop low & middle-income housing finance program

$119,390,000 Finance

Cooperative Housing Foundation AMAL-Cairo Amman Bank Mortgage Corp II Develop low & middle-income housing finance program

$46,430,000 Finance

zAmbiAChemonics International Chemonics Global program of emerging market technical


WWW.OPIC.GOV


AfriCA AnD the miDDle eAst regionAlEligible US Investors Millennium Global Africa Opportunities Fund Direct equity fund $100,000,000 Investment

FundsEmerging Capital Partners LLC ECP Africa FIII Investment LLC Direct equity fund $60,000,000 Investment

FundsGreylock Capital Associates, LLC Greylock Africa Opportunity Fund I Direct equity fund $67,000,000 Investment

FundsShoreBank International Ltd. BRAC Africa Microfinance, Ltd (Class A & B) Lending to BRAC-owned microfinance institutions $28,000,000 Finance

asIa and the PaCIfIC

AfghAnistAnChemonics International Chemonics Global program of emerging market technical

assistance contracts$3,178,156 Insurance

U.S. Citizen Pacific Collection Company/Tribal Loom Expansion of handwoven rug manufacturing operation

$975,000 Finance

Anthony Woods Sustainable Energy Services Afghanistan Installation of solar & wind renewable energy systems

$2,000,000 Finance

bAnglADeshChemonics International Chemonics Global program of emerging market technical


inDiACitibank, N.A. Asa Grama Vidiyal Trust* Expansion of microfinance portfolio $2,333,100 FinanceCitibank, N.A. Bhartiya Samruddhi Finance Ltd* Expansion of microfinance portfolio $3,888,500 FinanceCitibank, N.A. Friends of Women’s World Banking* Expansion of microfinance portfolio $3,888,500 FinanceCitibank, N.A. Grameen Financial Services Private Ltd* Expansion of microfinance portfolio $2,333,100 FinanceCitibank, N.A. SKS Microfinance PVT Ltd* Expansion of microfinance portfolio $3,888,500 FinanceCitibank, N.A. Spandana Sphoorty Financials Ltd* Expansion of microfinance portfolio $16,665,000 FinanceCitibank, N.A. Spandana Sphoorty Financials Ltd* Expansion of microfinance portfolio $3,888,500 FinanceFirst Carlyle Growth VI Repco Home Finance Limited Mortgage finance facility $30,000,000 FinanceCharles Ransler, IV Husk Power Systems, Inc Biomass waste to energy $750,000 FinanceSaratoga Partners IV, L.P. Cema Electric Lighting Products India PVT Ltd Expansion & operation of lighting

production facility$10,000,000 Finance

Mr.Inderpreet Wadhwa Azure Power Punjab Private Limited 2MW photovoltaic solar power project $6,230,000 Finance

mongoliAWallace M. Mays IKH Tokhoirol XXK Development of gold mine $10,000,000 Finance

philippinesChemonics International Chemonics Global program of emerging market technical


Microvest I, LP Seedfinance Corporation Microfinance on-lending $1,000,000 Insurance

sAmoACitibank N.A. Digicel (Samoa) Limited* Expansion of cellular telephone network $2,778,750 Finance

VietnAmChemonics International Chemonics Global program of emerging market technical


WM Capital Australis Aquaculture LLC Expansion of barramundi fish aquaculture operations

$5,400,000 Finance

eurOPe and eurasIa

ArmeniABankworld, Inc. Ardshininvestbank CJSC Expansion of Ardshininvestbank’s SME

loan portfolio$9,750,000 Finance

Chemonics International Chemonics Global program of emerging market technical assistance contracts

$4,441 Insurance

AzerbAiJAnChemonics International Chemonics Global program of emerging market technical


Financial Services Volunteer Corps Turanbank OJSC Expansion of SME lending portfolio $7,312,500 FinanceMicrovest I, L.P. Inkishaf unchun Maliyye (“FinDev”) Microfinance on-lending $1,000,000 InsuranceMicrovest I, L.P. Norwegian Microcredit LLC (“Normicro”) Microfinance on-lending $750,000 InsuranceMicrovest I, L.P. Credagro Microfinance on-lending $3,000,000 Insurance

bosniA AnD herzegoVinAChemonics International Chemonics Global program of emerging market technical


Microvest I, L.P. Mikrokreditna Organizacija MI-BOSPO Microfinance on-lending $1,263,436 Insurance



georgiAChemonics International Chemonics Global program of emerging market technical


Citibank, N.A. Joint Stock Company TBC Bank* Loans to SME’s/low & middle income mortgages/consumer loans

$40,000,000 Finance

Citibank, NA Joint Stock Company TBC Bank Fund low & middle income mortgages, SME & consumer loans

$4,276,360 Insurance

Firebird Management, LLC Joint Stock Company Bank of Georgia Funding of tier II capital (subordinated loan) $10,000,000 FinanceFirebird Management, LLC Joint Stock Company Bank of Georgia Expansion of residential mortgage portfolio $29,000,000 FinanceFirebird Avrora Advisors LLC Joint Stock Company SB Iberia Construction of moderate income apartments $6,300,000 FinanceFirebird Avrora Advisors LLC Joint Stock Company Iberia Real Estate Construction of apartment housing projects $10,000,000 FinanceEdward & Kay Sturdivant/Jerome T. Jerome/Jerome Baruffi

Sante GMT Products LLC Expansion of dairy manufacturing facility $10,000,000 Finance

Sterling Crum and Family/Rick Dortch/Keith Barnes

GMT Mtatsminda, LLC Renovation & restoration of multifunctional business complex

$10,000,000 Finance

Sterling Crum and Family/Rick Dortch/Keith Barnes

GMT Real Estate, LLC Mixed-use building complex $40,000,000 Finance

KAzAKhstAnChemonics International Chemonics Global program of emerging market technical


Citibank, N.A. Joint Stock Company Bank Centercredit* Expansion of low & middle-income mortgage portfolio

$30,000,000 Finance

Citibank, N.A. Joint Stock Company Halyk Savings Bank* Expansion of low & middle-income mortgage portfolio

$30,000,000 Finance

molDoVAChemonics International Chemonics Global program of emerging market technical


Western NIS Enterprise Fund Banca de Finante si Comert S.A. Expansion of FinComBank’s SME lending $6,000,000 Finance

polAnDAmtech U.S., Inc Amtech SP.ZO.O Construction of green housing units $2,000,000 Finance

romAniACooperative Housing Foundation Express Finance-Institutie Financiara Neban Expansion of microfinance & SME lending portfolio $10,000,000 FinanceDorian Klein Verida Credit IFN S.A. Funding mortgage loans for purchase of

residential housing$30,000,000 Finance

Romanian American Enterprise Fund Capa Finance S.A. Expansion of microfinance & SME lending portfolio $25,000,000 Finance

russiAPeter E. Gerwe Zao Star Networks Expansion of internet service business $28,000,000 FinanceWestern Retail Development LLC PJ Development LLC Building 26 Papa John pizza stores in Moscow $10,000,000 Finance

turKeyMr. Tunga Arcan Celengil/Mr. Tugrul Celengil Fersan Fermantasyon Urun San. ve Tic.A.S Expansion of canned fruit & vegetable

production facility$9,750,000 Finance

Chinook Sciences International LLC DT Metal Geri Kazanim Teknolojileri Sanayi Aluminum recycling plant $30,000,000 FinanceGeneral Electric Company Turkiye Garanti Bankasi A.S. Expansion of SME lending portfolio $100,000,000 FinancePaladin Realty Partners, LLC Paladin Realty Eurasia Investors, L.P. Affordable housing development fund $35,000,000 Investment

Funds

uzbeKistAnErik Brooks Owen O&S Consulting, LLC Remodeling of 3 hotels $840,000 Finance

europe AnD eurAsiA regionAlCSI Leasing, Inc. CSI Leasing Polska SP.Z.O.O et al Expansion of IT leasing activities $20,000,000 Finance

latIn amerICa and the CarIbbean

boliViAMicrovest I, LP Fundación Boliviana Para El Desarrollo De

La MujerMicrofinance on-lending $500,000 Insurance

Microvest I, LP Fundación Boliviana Para El Desarrollo De La Mujer

Microfinance on-lending $250,000 Insurance

brAzilCSI Latina Financial, Inc. CSI Latina Financial, Inc/CSI Latina Arrenda Expansion of IT leasing activities $10,000,000 Finance

ChileDriscoll Strawberry Associates, Inc. TB-Driscoll Strawberry Associates, Inc Expansion of blueberry production $21,000,000 Finance

WWW.OPIC.GOV


ColombiASharon Parks Gurtler and Charles Daniel Parks Parko Services, S.A.. Drilling of 20 oil wells $2,800,000 FinanceDr. Sadanand Joshi/Claudette Joshi Joshi Technologies International Inc Drilling of 20 oil wells $8,000,000 Finance

CostA riCAThe Alta Group, LLC Banco Improsa S.A. Finance expansion of SME lease portfolio $9,750,000 FinanceGeneral Electric Company Banco Bac San Jose, S.A. (Tranche A) Expansion of low & middle-income

mortgage lending$50,000,000 Finance

General Electric Company Banco Bac San Jose, S.A. (Tranche B) Expansion of SME lending portfolio $10,000,000 Finance

eCuADorMicrovest I, LP D-Miro, Misión Alianza-Ecuador,

Vía Perimetral, IslaMicrofinance on-lending $1,000,000 Insurance

Microvest I, LP D-Miro, Misión Alianza-Ecuador, Vía Perimetral, Isla

Microfinance on-lending $1,000,000 Insurance







el sAlVADorGeneral Electric Company Banco de America Central, S.A. (Tranche A) Expansion of low & middle-income

mortgage lending$35,000,000 Finance

General Electric Company Banco de America Central, S.A. (Tranche B) Expansion of SME lending portfolio $12,500,000 Finance

guAtemAlAGeneral Electric Company Banco de America Central, S.A. (Tranche A) Expansion of low & middle-income

mortgage portfolio$30,000,000 Finance

General Electric Company Banco de America Central, S.A. (Tranche B) Expansion of SME lending portfolio $5,000,000 Finance

hAitiChemonics International Chemonics Global program of emerging market technical


Seaboard Overseas Limited Les Moulins D’Haiti S.E.M. (LMH) Expansion of flour mill $6,594,818 Insurance

honDurAsCitibank, N.A. Digicel Honduras S.A. de CV* Cellular telecommunications network $15,000,000 FinanceGeneral Electric Company Banco de America Central Honduras,

S.A.(Tranche A)Expansion of low & middle-income mortgage lending

$20,000,000 Finance

General Electric Company Banco de America Central Honduras, S.A.(Tranche B)

Expansion of SME lending portfolio $17,500,000 Finance

JAmAiCAAmerican International School of Kingston Foundation, Inc.

American International School of Kingston Relocation & expansion of campus for K-12 school $3,150,000 Finance

mexiCoThe Alta Group, LLC Docuformas S.A.P.I. de C.V. Expansion of SME leasing portfolio $7,800,000 FinanceCambridge Liquidity Partners, Inc. & Omidyar

Tufts Microfinance FundVehiculos Liquidos Financieros Sapi de C.V. Sofom E.N.R

Liquidity to non-bank institutions for micro & SME loans

$25,000,000 Finance

CSI Latina Financial, Inc. CSI Latina Financial, Inc/CSI Leasing Mexic Expansion of IT leasing activities $10,000,000 FinanceMBIA Insurance Corporation Promotora de Infraestructura Registral, S.A. Local capital markets bond issuance $250,000,000 Finance

niCArAguAChemonics International Chemonics Global program of emerging market technical


General Electric Company Banco de America Central, S.A. (Tranche A) Expansion of low & middle-income mortgage lending

$10,000,000 Finance

General Electric Company Banco de America Central, S.A. (Tranche B) Expansion of SME lending portfolio $2,500,000 FinanceMicrovest I, L.P. Fondo Nicaraguense para el Desarrollo

ComunitarioMicrofinance on-lending $750,000 Insurance

pAnAmACitibank, N.A. Digicel Panama S.A.* Greenfield mobile telecom company $15,000,000 FinanceGeneral Electric Company International Bank, Inc (Tranche A) Low & middle-income mortgage lending $5,000,000 FinanceGeneral Electric Company International Bank, Inc (Tranche B) Expansion of SME lending portfolio $2,500,000 Finance

pArAguAyChemonics International Chemonics Global program of emerging market technical




peruChemonics International Chemonics Global program of emerging market technical

assistance contracts$2,857,300 Insurance

Michael Deutschman & Gino Picasso Globokas Peru, S.A.C. Expansion of financial-telecom services business $2,500,000 FinanceGTV GloboKasNet LLC GloboKas Peru S.A.C. Correspondent agent network to provide electronic

financial services to rural & semi-urban population$2,500,000 Insurance

lAtin AmeriCA AnD the CAribbeAn regionAlAlsis International Holdings, LLC Fondo Alsis Mexico de Vivienda de Interes SO Closed-end investment fund $50,000,000 Investment

FundsCSI Latina Financial, Inc. CSI Latina Financial, Inc/CSI Leasing de Cent Expansion of IT leasing activities $10,000,000 FinanceGlobal Partnerships Global Partnerships Microfinance Fund

2008, LLCProvide capital to expand MFI’s in Latin America (senior loan)

$1,500,000 Finance

Global Partnerships Global Partnerships Microfinance Fund 2008, LLC

Provide capital to expand MFI’s in Latin America (subordinated loan)

$5,375,000 Finance

Paladin Realty Partners, LLC Paladin Realty Latin America Investors III Affordable housing development fund $65,000,000 Investment Funds

All opiC CountriesAccion International Emergency Liquidity Facility, L.P. Expansion of emergency lending program to MFI’s $4,000,000 FinanceE+CO., Inc E+CO., Inc Loans to SMEs for small clean energy projects $10,000,000 FinanceMFX Solutions LLC MFX Solutions, Inc Guaranty to hedge provider to facilitate local

currency lending to MFIs$20,000,000 Finance

The Omidyar Network Microvest I, LP Fund medium & long-term senior loans to MFIs $10,000,000 FinanceVGF Advisers (US) LLC Virgin Green Fund Global I, L.P. Closed-end investment fund $100,000,000 Investment

Funds

*Downstream transactions committed under framework agreements entered into during prior fiscal years.

fy2009 inVestment funDs portfolio ACtiVity

fund Name Portfolio Company Description Country/Region

Alsis Latin America Fund, L.P. BBVA-Bancomer NPL Portfolio Financial Services Mexico

Protexa Oil & Gas Maintenance Services Mexico

Asia Development Partners II, L.P. Orient Green Power Pte. Ltd. Renewable Energy India

ECP MENA Growth FII, LLC Agromed Agribusiness Tunisia

BACIM Financial Services Mauritania

Finaccess Holding Data & IT Services Morocco

North Africa Consumer Goods Consumer Products - Personal Care Tunisia

Société SHORESAL Real Estate Algeria

Paladin Realty Latin America Investors II, L.P. Arinpa Homebuilding Platform Housing Mexico

Botafogo Trade Center Real Estate Brazil

P2K Homebuilding Platform Housing Chile

Paladippsa Homebuilding Platform Housing Mexico

PM Homes Homebuilding Platform Housing Brazil

REDI Homebuilding Platform Housing Mexico

Tucan Homebuilding Platform Housing Peru

Russia Partners II O Series, L.P. Gameplay.tv Media Russia

Southeast Europe Equity Fund II, L.P. Ana Gida Consumer Products - Edible Oil Turkey

WWW.OPIC.GOV

oPic countriEs And ArEAs As Of sEPTEmbER 30, 2009

afrICa and the mIddle east

Algeria Angola Bahrain Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Central African Republic Chad Comoros Congo Congo, Democratic Republic of Côte d’Ivoire

Djibouti Egypt Equatorial Guinea Eritrea Ethiopia Gabon Gambia Ghana Guinea Guinea-Bissau Iraq Israel Jordan Kenya Kuwait

Lebanon Lesotho Liberia Madagascar Malawi Mali Mauritania Mauritius Morocco Mozambique Namibia Niger Nigeria Oman Rwanda

São Tomé and Príncipe Senegal Sierra Leone Somalia South Africa Swaziland Tanzania Togo Tunisia Uganda West Bank and Gaza Yemen Zambia Zimbabwe

asIa and the PaCIfIC

Afghanistan Bangladesh Cambodia Cook Islands East Timor Fiji India

Indonesia Kiribati Laos Malaysia Marshall Islands Micronesia, Federated States of Mongolia

Nepal Pakistan Palau Papua New Guinea Philippines Samoa Singapore

South Korea Sri Lanka Taiwan Thailand Timor-Leste Tonga Vietnam

eurOPe and eurasIa

Albania Armenia Azerbaijan Bosnia and Herzegovina Bulgaria Croatia Cyprus Czech Republic Estonia

Georgia Greece Hungary Ireland Kazakhstan Kosovo Kyrgyzstan Latvia Lithuania

Macedonia Malta Moldova Montenegro Northern Ireland Poland Portugal Romania Russia

Serbia Slovakia Slovenia Tajikistan Turkey Turkmenistan Ukraine Uzbekistan

latIn amerICa and the CarIbbean

Anguilla Antigua and Barbuda Argentina Aruba Bahamas Barbados Belize Bolivia Brazil

Chile Colombia Costa Rica Dominica Dominican Republic Ecuador El Salvador French Guiana Grenada

Guatemala Guyana Haiti Honduras Jamaica Mexico Netherlands Antilles Nicaragua Panama

Paraguay Peru St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines Suriname Trinidad and Tobago Turks and Caicos Uruguay

OPIC services encourage U.s. private investment in some 150

countries and areas around the world, contributing to economic

growth at home and abroad.

OPIC services are generally available in the countries and areas

listed below. from time to time, statutory and policy constraints

may limit the availability of OPIC services in certain countries, or

countries where services were previously unavailable may become

eligible. Investors are urged to contact OPIC directly or check the

website: www.opic.gov/doing-business/where-we-work for up-

to-date information regarding the availability of OPIC services in

specific countries, as well as information on the availability of OPIC

services in countries not listed.


KPMG LLP 2001 M Street, NW Washington, DC 20036

Independent Auditors’ Report on Financial Statements

To the Board of Directors Overseas Private Investment Corporation:

We have audited the accompanying balance sheets of the Overseas Private Investment Corporation (OPIC) as of September 30, 2009 and 2008, and the related statements of income, capital and retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of OPIC’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards and OMB Bulletin No. 07-04 require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of OPIC’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Overseas Private Investment Corporation as of September 30, 2009 and 2008, and the results of operations, and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our reports dated November 12, 2009, on our consideration of OPIC’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of those reports is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in assessing the results of our audits.

November 12, 2009

KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative.

WWW.OPIC.GOV

Assets 2009 2008

Fund Balance with U.S. Treasury (notes 2 and 4) $ 549,470 $ 554,818

U.S. Treasury securities, at amortized cost plus related receivables (notes 2 and 7) 4,898,512 4,767,168

Direct loans outstanding, net (notes 2 and 10) 808,363 617,356

Accounts receivable resulting from investment guaranties, net (notes 2 and 11) 50,523 56,786

Assets acquired in insurance claims settlements, net (notes 2 and 11) 40,946 65,355

Guaranty receivable (notes 2 and 18) 233,959 152,485

Accrued interest and fees and other 25,496 22,734

Furniture, equipment and leasehold improvements at cost less accumulated depreciation and amortization of $14,566 in FY2009 and $14,263 in FY2008 (note 2) 4,069 2,399

Total assets $ 6,611,338 $ 6,239,101

liabilities, Capital, and retained earnings

Liabilities:

Reserve for political risk insurance (note 9) $ 300,000 $ 300,000

Reserve for investment guaranties (note 10) 676,422 625,291

Accounts payable and accrued expenses 5,986 5,572

Guaranty liability (notes 2 and 18) 233,959 152,485

Customer deposits and deferred income 40,517 37,145

Borrowings from U.S. Treasury, and related interest (note 6) 1,006,520 861,286

Unearned premiums 10,590 12,600

Deferred rent & rent incentives from lessor of $4,975 and $4,449 net of accumulated amortization of $1,709 and $1,357 in FY2009 and FY2008 (note 14) 3,266 3,092

Total liabilities 2,277,260 1,997,471

Contingent liabilities (notes 2 and 17)

Capital and retained earnings:

Contributed capital $ 50,000 $ 50,000

Credit funding (note 5) 111,056 115,765

Interagency transfers (note 2) 10,810 19,499

Retained earnings and reserves:

Insurance (notes 9 and 12) 839,271 1,049,510

Guaranty (notes 10 and 12) 3,322,941 3,006,856

4,334,078 4,241,630

Total liabilities, capital, and retained earnings $ 6,611,338 $ 6,239,101

See accompanying notes to financial statements.

bAlAncE sHEEtsOverseas Private Investment Corporation—September 30, 2009 and 2008 ($ in thousands)


revenues 2009 2008

Political risk insurance premiums and fees (note 9) $ 17,415 $ 18,770

Investment financing interest and fees 149,053 184,495

Interest on finance program deposits 20,197 21,855

Other operating income — 1

Interest on U.S. Treasury securities 202,781 220,231

Total revenues 389,446 445,352

expenses

Provisions for reserves:

Political risk insurance (notes 2 and 9) $ (944) $ (15,169)

Investment financing (notes 2, 10 and 11) 32,683 197,334

Salaries and benefits (note 15) 28,844 27,470

Rent, communications and utilities (note 14) 7,501 7,361

Contractual services 23,401 13,001

Travel 3,051 3,202

Interest on borrowings from U.S. Treasury (note 6) 50,356 43,669

Depreciation and amortization (note 2) 303 364

Other general and administrative expenses 1,698 1,619

Total expenses 146,893 278,851

Net income $ 242,553 $ 166,501


stAtEMEnts of incoMEOverseas Private Investment Corporation—Years ended September 30, 2009 and 2008 ($ in thousands)

WWW.OPIC.GOV

equity reserves

Contributedcapital

Creditfunding

interagencytransfers

insurance (notes 9 & 12)

guaranty (notes 10 & 12)

retained earnings total

balance, sept. 30, 2007 $ 50,000 $ 109,641 $ 11,472 $ 1,321,128 $ 3,058,454 $ — $ 4,550,695

Net income — — — (250, 091) 416,592 — 166,501

Return credit funding to U.S. Treasury — (3,700) — — (552,259) — (555,959)

Credit funding received from: Accumulated earnings — 52,000 — (23,500) — (28,500) —

Credit appropriations — 70,393 — — — — 70,393

Credit funding used — (112,569) — — 84,069 28,500 —

Interagency transfers — — 8,027 1,973 — — 10,000

balance, sept. 30, 2008 $ 50,000 $ 115,765 $ 19,499 $ 1,049,510 $ 3,006,856 $ — $ 4,241,630

Net income — — — (161,928) 404,481 — 242,553

Return credit funding to U.S. Treasury — (18,370) — — (223,122) — (241,492)

Intraagency transfers (30,000) 30,000 —

Credit funding received from: Accumulated earnings — 59,360 — (29,000) — (30,360) —

Credit appropriations — 89,387 — — — — 89,387

Credit funding used — (135,086) — — 104,726 30,360 —

Interagency transfers — — (8,689) 10,689 — — 2,000

balance, sept. 30, 2009 $ 50,000 $ 111,056 $ 10,810 $ 839,271 $ 3,322,941 $ — $ 4,334,078


stAtEMEnts of cAPitAl And rEtAinEd EArninGsOverseas Private Investment Corporation—Years ended September 30, 2009 and 2008 ($ in thousands)


2009 2008

Cash flows from operating activities:

Net income $ 242,553 $ 166,501

Adjustments to reconcile net income to net cash provided by operating activities:

Provisions for:

Political risk insurance (944) (15,169)

Investment financing 32,683 197,334

Amortization of premiums on U.S. securities 13,268 7,663

Accretion of discounts on U.S. securities (11,733) (14,460)

Amortization of deferred rent and rental incentives 169 248

Increase in rent incentives 5 21

Depreciation and amortization 303 364

(Increase) decrease in operating assets:

Accrued interest and fees and other 4,742 10,573

Guaranty receivable (81,474) 15,995

Assets acquired in insurance claims settlements (206) (1,980)

Recoveries on assets acquired in insurance claims settlements 25,559 25,858

Assets acquired in finance claims settlements (11,654) (51,455)

Recoveries on assets acquired in finance claims settlements 11,895 12,364

Increase (decrease) in operating liabilities:

Accounts payable and accrued expenses 414 48

Customer deposits and deferred income 3,372 (5,390)

Guaranty liability 81,474 (15,995)

Unearned premiums (2,010) (727)

Cash provided by operating activities 308,416 331,793

Cash flows from investing activities:

Sale and maturity of U.S. Treasury securities 1,231,877 1,013,194

Purchase of U.S. Treasury securities (1,372,260) (1,234,400)

Repayment of direct loans 104,603 92,051

Disbursement of direct loans (271,139) (77,628)

Acquisition of furniture and equipment (1,973) (732)

Cash used in investing activities (308,892) (207,515)

Cash flows from financing activities:

Return credit funding to U.S. Treasury (241,493) (555,959)

Interagency transfers 2,000 10,000

Credit appropriations 89,387 70,393

Credit reform borrowings from U.S. Treasury 145,234 67,742

Cash used in financing activities (4,872) (407,824)

Net decrease in cash (5,348) (283,546)

Fund Balance with U.S. Treasury at beginning of year 554,818 838,364

Fund Balance with U.S. Treasury at end of year $ 549,470 $ 554,818


stAtEMEnts of cAsH flowsOverseas Private Investment Corporation—Years ended September 30, 2009 and 2008 ($ in thousands)

WWW.OPIC.GOV

notEs to finAnciAl stAtEMEnts sePtember 30, 2009 and 2008

(1) stAtEMEnt of corPorAtE PurPosEThe Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government corporation created under the For-eign Assistance Act of 1961 (FAA), as amended. OPIC facilitates U.S. private investment in developing countries and emerging market economies, primarily by offering political risk insurance, investment guaranties, and direct loans. As a government corpo-ration, OPIC is not subject to income tax.

(2) suMMAry of siGnificAnt AccountinG PoliciEsbasis of presentation: These financial statements have been prepared to report the financial position, results of operations, and cash flows of OPIC. OPIC’s accounting policies conform to account-ing principles generally accepted in the United States of America. OPIC’s financial statements are presented on the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recognized when a liability is incurred, without regard to receipt or payment of cash.

fund balance with u.s. treasury: Substantially all of OPIC’s receipts and disbursements are processed by the U.S. Treasury which, in effect, maintains OPIC’s bank accounts. For purposes of the Statement of Cash Flows, Fund Balance with U.S. Treasury is considered cash.

investment in u.s. treasury securities: By statute, OPIC is authorized to invest funds derived from fees and other revenues related to its insurance and preinvestment programs in U.S. Treasury securities. Investments are carried at face value, net of unamortized discount or premium, and are held to maturity. OPIC has the ability and intent to hold its investments until maturity or until the carrying cost can be otherwise recovered.

Assets Acquired in investment guaranty and insurance Claims settlements: Assets acquired in claims settlements are valued at the lower of management’s estimate of the net realiz-able value of recovery or the cost of acquisition.

OPIC acquires foreign currency in settlement of inconvertibility claims when an insured foreign enterprise is unable to convert foreign currency into U.S. dollars, as well as in some direct loan and investment guaranty collection efforts. The initial U.S. dollar equiva-lent is recorded and revalued annually until the foreign currency is utilized by OPIC or other agencies of the United States Government, or until it is exchanged for U.S. dollars by the foreign government.

Allowances: The allowances are based on management’s periodic evaluations of the underlying assets. In its evaluation, management considers numerous factors, including, but not limited to, general economic conditions, asset composition, prior loss experience, the estimated fair value of any collateral, and the present value of expected future cash flows.

Depreciation and Amortization: OPIC capitalizes property and equipment at historical cost for acquisitions exceeding $5,000. Depreciation and amortization of fixed assets, leasehold improve-ments, and lease incentives are computed using the straight-line method over the estimated useful life of the asset or lease term, whichever is shorter, with periods ranging from 5 to 15 years.

reserves for political risk insurance and investment guaranties: The reserves for political risk insurance and invest-ment guaranties provide for losses inherent in those operations using the straight-line method.

These reserves are general reserves, available to absorb losses related to the total insurance and guaranties outstanding, which are off-balance-sheet commitments. The reserves are increased by provisions charged to expense and decreased for claims settlements. The provisions for political risk insurance and investment guaranties are based on management’s evalu-ation of the adequacy of the related reserves. This evaluation encompasses consideration of past loss experience, changes in the composition and volume of the insurance and guaranties outstanding, worldwide economic and political conditions, and project-specific risk factors. Also, in the political risk insurance reserve evaluation, OPIC takes into consideration losses incurred but not yet reported.

fAsb Accounting standards Codification topic 460 for the guarantee topic (fAsb AsC 460): FASB ASC 460 requires that upon issuance of a guaranty, the guarantor must disclose and recognize a liability for the fair value of the obligation it as-sumes under that guaranty. The initial recognition and measure-ment requirement of FASB ASC 460 applies only to guaranties issued or modified after December 31, 2002. OPIC’s initial guaranty obligation reported, represents the fair value of the investment guaranties. This obligation is reduced over the term of the investment guaranty agreements, as OPIC is released from its obligation.

revenue recognition: Facility fees are received in advance and recognized as deferred income, then amortized over the applicable loan period using the straight-line method. Interest on loans and guaranty fees on investment guaranties are accrued based on the principal amount outstanding. Revenue from both loan interest payments and guaranty fees that is more than 90 days past due is recognized only when cash is received. Revenue from political risk insurance premiums is recognized over the contract coverage period. Accretion of premium and discount on investment securi-ties is amortized into income under a method approximating the effective yield method.

interagency transfers: OPIC periodically receives funding from other U.S. Government agencies to be used to support various programs and initiatives.


use of estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the re-ported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Commitments and Contingencies: Liabilities from loss con-tingencies, other than those related to political risk insurance and investment guaranties, arising from claims, assessments, litigation, fines and penalties, and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Loss contingencies that do not meet these criteria, but are reasonably possible and estimable are not accrued, but are disclosed in Note 17.

(3) intrAGovErnMEntAl finAnciAl ActivitiEsOPIC, as a U.S. Government corporation, is subject to financial decisions and management controls of the Office of Management and Budget. As a result of this relationship, OPIC’s operations may not be conducted, nor its financial position reported, as they would be if OPIC were not a government corporation. Furthermore, in accordance with international agreements relating to its programs, foreign currency acquired by OPIC can be used for U.S. Govern-ment expenses. This constitutes an additional means, which would otherwise be unavailable, by which OPIC can recover U.S. dollars with respect to its insurance and investment financing programs.

(4) fund bAlAncE witH u.s. trEAsuryOPIC is restricted in its uses of certain cash balances, as described below. The Fund Balance with U.S. Treasury as of September 30, 2009 and 2008 consists of the following (dollars in thousands):

2009 2008Restricted: Pre-Credit reform $ 1,537 7 Credit reform 541,965 544,549 Interagency fund transfers 1 1Unrestricted 5,967 10,261 Total $ 549,470 554,818

The Federal Credit Reform Act of 1990 established separate accounts for cash flows associated with investment financ-ing activity approved prior to implementation of the Act and investment financing activity subject to the Act. With the advent of Credit Reform, OPIC is not permitted to invest its pre-Credit Reform cash balances. These balances grow over time, and when they are determined to be no longer needed for the liquidation of the remaining pre-Credit Reform direct loans and investment guaranties, they are transferred to OPIC’s unrestricted noncredit insurance account. In 2008, OPIC transferred $625,000 to the

noncredit insurance account. There was no transfer in 2009. Credit Reform balances are also maintained in the form of unin-vested funds. The U.S. Treasury pays OPIC interest on those cash balances except for undisbursed credit funding.

(5) crEdit fundinG OPIC’s finance activities are subject to the Federal Credit Reform Act of 1990, which was implemented as of October 1, 1991. Credit Reform requires agencies to estimate the long-term cost to the government of each fiscal year’s new credit transactions and to obtain funding through the appropriations process equal to the net present value of such costs at the beginning of the year. OPIC’s credit funding is available for three years. In addition, the Act requires the administrative costs related to its credit program to be displayed.

In fiscal year 2009, OPIC’s appropriations legislation authorized the corporation to use $29 million of its accumulated earnings to cover the future costs of credit transactions committed in fiscal years 2009 through 2011. In fiscal year 2008, OPIC was authorized to use $23.5 million to cover commitments in fiscal years 2008 through 2010. In addition to the credit funding allocated directly to OPIC through the appropriations process, OPIC has received a total of $67 million in net transfers from other agencies to be used exclu-sively to finance projects in the New Independent States (NIS).

The following table shows the status of funding for credit activi-ties (dollars in thousands):

2009 2008Balance carried forward $ 115,765 109,641Upward reestimates 89,387 70,393Transferred from earnings 59,360 52,000Expired credit funding (18,370) (3,700)Credit funding used (135,086) (112,569) Credit funding remaining $ 111,056 115,765

Changes in financial and economic factors over time can affect the subsidy estimates made at the time of loan and guaranty commitments. Therefore, in accordance with OMB guidelines, OPIC reestimates subsidy costs for each group of loans and guaranties obligated in a given fiscal year to account for those changing factors. Reestimates that result in increases to subsidy costs are funded with additional appropriated funds that are made automatically available, while decreases to subsidy costs result in excess funds that are transferred to the U.S. Treasury. OPIC incurred increased subsidy costs of $89.4 million and $70.4 million and decreases in subsidy costs of $175.7 million and $504.9 million in fiscal years 2009 and 2008, respectively.

(6) borrowinGs froM tHE u.s. trEAsuryIn accordance with the Federal Credit Reform Act of 1990, the portion of investment financing activities not funded through the

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appropriations process must be funded by borrowings from the U.S. Treasury. Borrowings for Credit Reform financings totaled $335.4 million in 2009 and $258.8 million in 2008, all of which have been disbursed. OPIC paid a total of $50.4 million and $43.7 million in interest to the U.S. Treasury during fiscal years 2009 and 2008, respectively. Repayments of borrowings from the U.S. Treasury totaled $190.2 million in 2009 and $190.7 million in 2008. Future payments for borrowing outstanding at Septem-ber 30, 2009 are as follows (dollars in thousands):

payment due in:Fiscal Year 2010 $ 16,020Fiscal Year 2011 40,465Fiscal Year 2012 49,095 Fiscal Year 2013 42,641Fiscal Year 2014 55,863Thereafter 802,436 Total $ 1,006,520

(7) invEstMEnt in u.s. trEAsury sEcuritiEsThe composition of investments and related receivables at Sep-tember 30, 2009 and 2008 is as follows (dollars in thousands):

2009 2008Investments, amortized cost $ 4,857,835 4,718,986Interest receivable 40,677 48,182 Total $ 4,898,512 4,767,168

The amortized cost and estimated fair value of investments in U.S. Treasury securities are as follows (dollars in thousands):

sept. 30, 2009 sept. 30,2008Gross amortized cost $ 4,857,835 4,718,986Gross unrealized gains 342,457 293,977Gross unrealized losses (651) (207) Estimated fair value $ 5,199,641 5,012,756

At September 30, 2009, the securities held had an interest range of .875% to 10.6% and a maturity period from one month to almost 19 years.

OPIC holds its securities to maturity. The amortized cost and esti-mated fair value of U.S. Treasury securities at September 30, 2009, by contractual maturity, are shown below (dollars in thousands):

Amortized estimated cost fair valueDue in one year or less $ 1,141,732 1,159,360Due after one year through five years 2,796,459 2,910,165Due after five years through 10 years 614,813 733,430Due after 10 years 304,831 396,686 Total $ 4,857,835 5,199,641

(8) stAtutory liMitAtions on tHE issuAncE of insurAncE And finAncEOPIC issues insurance and financing under a single limit for both programs, currently $29 billion, fixed by statute in the FAA. At September 30, 2009, OPIC’s insurance and finance programs have collectively utilized $13.3 billion.

(9) PoliticAl risK insurAncE Insurance revenues include the following components for the years ended September 30 (dollars in thousands):

2009 2008Political risk insurance premiums $ 17,411 19,633Misc. insurance income (expense) 4 (863) Total insurance revenue $ 17,415 18,770

OPIC’s capital, allowance, retained earnings, and reserves available for insurance at September 30, 2009 and 2008 totaled $1.2 billion and $1.4 billion, respectively. Charges against retained earnings could arise from (A) outstanding political risk insurance contracts, (B) pending claims under insurance contracts, and guaranties is-sued in settlement of claims arising under insurance contracts.

(a) political risk insurance OPIC insures investments for up to 20 years against three different risks: inconvertibility of currency, expropriation, and political violence. Insurance coverage against inconvert-ibility protects the investor from increased restrictions on the investor’s ability to convert local currency into U.S. dollars. Inconvertibility insurance does not protect against devalua-tion of a country’s currency.

Expropriation coverage provides compensation for losses due to confiscation, nationalization, or other governmental actions that deprive investors of their fundamental rights in the investment.

Insurance against political violence insures investors against losses caused by politically motivated acts of violence (war, revolution, insurrection, or civil strife, including terrorism and sabotage).

Under most OPIC insurance contracts, investors may obtain all three coverages, but claim payments may not exceed the single highest coverage amount. Claim payments are limited by the value of the investment and the amount of current coverage in force at the time of the loss and may be reduced by the insured’s recoveries from other sources. In addition, in certain contracts, OPIC’s requirement to pay up to the single highest coverage amount is further reduced by stop-loss and risk-sharing agreements. Finally, losses on insurance claims may be reduced by recoveries by OPIC as subrogee of the insured’s claim against the host government. Payments made


under insurance contracts that result in recoverable assets are reported as assets acquired in insurance settlements.

OPIC’s Maximum Contingent Liability at September 30, 2009 and 2008 was $2.7 billion and $2.9 billion, respectively. This amount is OPIC’s estimate of maximum exposure to insurance claims, which includes standby coverage for which OPIC is committed but not currently at risk. A more realistic measure of OPIC’s actual exposure to insurance claims is the sum of each single highest “current” coverage for all con-tracts in force, or Current Exposure to Claims (CEC). OPIC’s CEC at September 30, 2009 and 2008 was $1.9 billion and $2.2 billion, respectively.

(b) pending Claims At both September 30, 2009 and 2008 OPIC had no material pending insurance claims. In addition to requiring formal ap-plications for claimed compensation, OPIC’s contracts generally require investors to notify OPIC promptly of host government ac-tion that the investor has reason to believe is or may become a claim. Compliance with this notice provision sometimes results in the filing of notices of events that do not mature into claims.

OPIC does not record a specific liability related to such notices in its financial statements, due to the highly specula-tive nature of such notices, both as to the likelihood that the events referred to will ripen into any claims, and the amounts of compensation, if any, that may become due. Any claims that might arise from these situations are factored into the reserves for political risk insurance.

Changes in the reserve for political risk insurance during fiscal years 2009 and 2008 were as follows (dollars in thousands):

2009 2008Beginning balance $ 300,000 315,000Amount charged off (206) —Increase (decrease) in provisions (944) (15,169)Transfers from other reserves 1,150 169 Ending balance $ 300,000 300,000

(10) invEstMEnt finAncinGOPIC is authorized to provide investment financing to projects through direct loans and investment guaranties. Project financing provides medium- to long-term funding through direct loans and investment guaranties to ventures involving significant equity and/or management participation by U.S. businesses. Project financing looks for repayment from the cash flows generated by projects, and as such, sponsors need not pledge their own general credit beyond the required project completion period.

Investment funds use direct loans and investment guaranties to support the creation and capitalization of investment funds that

make direct equity and equity-related investments in new, ex-panding, or privatizing companies in emerging market economies. The fund managers, selected by OPIC, are experienced, private investment professionals. OPIC’s participation in a fund takes the form of long-term, secured loans and loan guaranties that supplement the fund’s privately raised equity. OPIC’s guaranty may be applied only to the debt portion of the fund’s capital and, for certain funds, to accrued interest on that debt. OPIC does not guaranty any of the fund’s equity, and all equity investments in OPIC-backed funds are fully at risk.

OPIC’s authorization to make direct loans and investment guaran-ties can be found in sections 234(c) and 234(b) of the FAA, respectively. Direct loans and investment guaranties are com-mitted in accordance with the Federal Credit Reform Act of 1990, pursuant to which loan disbursements and any claim payments for these commitments have been funded through appropriations actions, borrowings from the U.S. Treasury, and the accumulation of earnings or collection of fees. In fiscal years 2009 and 2008, $29 million and $23.5 million was made available for credit funding costs. OPIC is in compliance with all relevant limitations and credit funding appropriations guidance. OPIC’s capital, al-lowances, retained earnings, and reserves available for claims on its investment financing at September 30, 2009 and 2008 totaled $4.1 billion and $3.8 billion, respectively.

Direct Loans: Direct loans are made for projects in developing and other eligible countries involving U.S. small business or coopera-tives, on terms and conditions established by OPIC. Direct loan exposure at September 30, 2009 totaled $2.4 billion, of which ap-proximately $929 million was outstanding. Direct loan exposure at September 30, 2008 totaled $1.2 billion, of which approximately $766 million was outstanding. Interest income is not accrued on direct loans that have payments that are more than 90 days past due. Loans with payments more than 90 days past due totaled $115.2 million at September 30, 2009 and $147.7 million at September 30, 2008. If interest income had been accrued on those loans, it would have approximated $4.6 million during fiscal year 2009 and $3.5 million during fiscal year 2008. Interest col-lected on delinquent loans and recorded as income when received amounted to $17.7 million and $6.9 million for fiscal years 2009 and 2008, respectively.

Direct loans outstanding were as follows (dollars in thousands):

2009 2008Direct loans outstanding $ 928,589 765,748Allowance for uncollectible loans (120,226) (148,392)Direct loans outstanding, net $ 808,363 617,356

Changes in the allowance for uncollectible loans during fiscal years 2009 and 2008 were as follows (dollars in thousands):

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2009 2008Beginning balance $ 148,392 153,151Amounts charged off (5,065) (13,077)Recoveries 1,513 163(Decrease) increase in provisions (24,470) 9,344Provision for capitalized interest (144) (1,189)Ending balance $ 120,226 148,392

Investment Guaranties: OPIC’s investment guaranty covers the risk of default for any reason. In the event of a claim on OPIC’s guaranty, OPIC makes payments of principal and interest to the lender. These payments are recorded as accounts receivable resulting from investment guaranties. The loans that are guar-anteed can bear either fixed or floating rates of interest and are payable in U.S. dollars. OPIC’s losses on payment of a guaranty are reduced by the amount of any recovery from the borrower, the host government, or through disposition of assets acquired upon payment of a claim. Guaranties extend from 5 to 21 years for project finance and from 10 to 18 years for investment funds.

Credit risk represents the maximum potential loss due to possible nonperformance by borrowers under terms of the contracts. OPIC’s exposure to credit risk under investment guaranties, including claim-related assets, was $8.2 billion at September 30, 2009, of which $5 billion was outstanding. Of the $8.2 billion of exposure, $6 billion was related to project finance and $2.2 billion was related to investment fund guarantees. Of the $5 billion outstanding, $4.3 billion related to project finance and $700 million related to investment fund guaranties. Included in the $2.2 billion of investment fund exposure is $328 million of estimated interest that could accrue to the guaranty lender. This interest generally accrues over a 10-year period, payable upon maturity. Upon complete nonperformance by the borrower, OPIC would be liable for principal outstanding and interest accrued on disbursed investment funds. At September 30, 2009, $76 million of the $328 million had actually accrued to the guaranteed lender on disbursed investment funds; the remainder represents an estimate of interest that could accrue to the guaranteed lender over the remaining investment fund term.

At September 30, 2008, OPIC’s exposure to credit risk under investment guaranties, including claim-related assets, was $7.2 billion, of which $4.8 billion was outstanding. Of the $7.2 billion of exposure, $5.5 billion was related to project finance and $1.7 billion was related to investment fund guarantees. Of the $4.8 billion outstanding, $4.2 billion related to project finance and $600 million related to investment fund guaranties. Included in the $1.7 billion of investment fund exposure is $299 million of estimated interest that could accrue to the guaranty lender. This interest generally accrues over a 10-year period, payable upon maturity. Upon complete nonperformance by the borrower, OPIC would be liable for principal outstanding and interest accrued on disbursed investment funds. At September 30, 2008, $43 million

of the $299 million had actually accrued to the guaranteed lender on disbursed investment funds; the remainder represents an estimate of interest that could accrue to the guaranteed lender over the remaining investment fund term.

Changes in the reserve for investment guaranties during fiscal years 2009 and 2008 were as follows (dollars in thousands):

2009 2008Beginning balance $ 625,291 486,304Amount charged off — (51,455)Recoveries 1,098 —Increase (decrease) in provisions 50,033 190,442Ending balance $ 676,422 625,291

Mindful that uncertainty in the global economy and volatility in world financial markets can affect loan repayments, it is OPIC policy to regularly review reserve adequacy. Accordingly, to provide for potential future impact to the portfolio OPIC set aside an additional prudential reserve in fiscal year 2009. This reserve is reflected in the above $50 million “Increase in provisions”.

(11) Accounts rEcEivAblE froM invEstMEnt GuArAntiEs And AssEts AcquirEd in insurAncE clAiMs sEttlEMEnts (clAiM-rElAtEd AssEts)Claim-related assets may result from payments on claims under either the investment financing program or the insurance pro-gram. Under the investment financing program, when OPIC pays a guaranteed party, a receivable is created. Under the insurance program, similar receivables reflect the value of assets, generally shares of stock, local currency, or host country notes, that may be acquired as a result of a claim settlement. These receivables are generally collected over a period of 1 to 15 years.

Accounts receivable resulting from investment guaranties were as follows (dollars in thousands):

2009 2008Accounts receivable resulting from investment guaranties $ 71,806 70,949Allowance for doubtful recoveries (21,283) (14,163)Accoounts receivable, net $ 50,523 56,786

Changes in the allowance for doubtful recoveries for assets re-sulting from investment guaranties during fiscal years 2009 and 2008 were as follows (dollars in thousands):

2009 2008Beginning balance $ 14,163 16,477Increase (decrease) in provisions 7,120 (2,452)Recoveries — 138Ending balance $ 21,283 14,163


Assets acquired in insurance claims settlements were as follows (dollars in thousands):

2009 2008Assets acquired in insurance claims settlements $ 43,819 69,378Allowance for doubtful recoveries (2,873) (4,023)Accounts receivable, net $ 40,946 65,355

Changes in the allowance for doubtful recoveries for assets acquired in insurance claims settlements during fiscal years 2009 and 2008 were as follows (dollars in thousands):

2009 2008Beginning balance $ 4,023 4,192Amounts charged off — —Transfers to other reserves (1,150) (169)Ending balance $ 2,873 4,023

(12) rEsErvEs And full fAitH And crEdit Section 235(c) of the FAA established a fund which shall be available for discharge of liabilities under insurance or reinsur-ance or under similar predecessor guaranty authority. This fund consists of the Insurance Reserve and the Guaranty Reserve for the respective discharge of potential future liabilities arising from insurance or from guaranties issued under Section 234(b) of the FAA. These amounts may be increased by transfers from retained earnings or by appropriations. In fiscal years 2009 and 2008, OPIC’s retained earnings were allocated to these reserves on the basis of maximum exposure outstanding for insurance and guaranties respectively, thereby reflecting OPIC’s increased ability to absorb potential losses without having to seek ap-propriated funds.

All valid claims arising from insurance and guaranties issued by OPIC constitute obligations on which the full faith and credit of the United States of America is pledged for full payment. At September 30, 2009 and 2008, the Insurance Reserve totaled $839 million and $1 billion, and the Guaranty Reserve totaled $3.3 billion and $3 billion, respectively. Should funds in OPIC’s reserves not be sufficient to discharge obligations arising under insurance, and if OPIC exceeds its $100 million borrowing author-ity authorized by statute for its insurance program, funds would have to be appropriated to fulfill the pledge of full faith and credit to which such obligations are entitled. Standing authority for such appropriations is contained in Section 235(f) of the FAA. The Federal Credit Reform Act of 1990 authorizes permanent, indefinite appropriations and borrowings from the U.S. Treasury, as appropriate, to carry out all obligations resulting from the investment financing program.

(13) disclosurEs About fAir vAluE of finAnciAl instruMEntsThe estimated values of each class of financial instrument for which it is practicable to estimate a fair value at September 30, 2009 are as follows (dollars in thousands):

Carrying amount fair valueFinancial Assets: Cash $ 549,470 549,470 U.S. Treasury securities 4,857,835 5,199,641 interest receivable on securities 40,677 40,677 Direct loans 808,363 808,363 Accounts receivable from investment guaranties 50,523 50,523 Assets acquired in insurance claims settlements 40,946 40,946Financial Liabilities: Borrowing from the U.S. Treasury $ 1,006,520 1,599,705

The methods and assumptions used to estimate the fair value of each class of financial instrument are described below:

Cash: The carrying amount approximates fair value because of the liquid nature of the cash, including restricted cash.

u.s. treasury securities: The fair values of the U.S. Treasury securities are estimated based on quoted prices for Treasury securities of the same maturity available to the public. OPIC is not authorized, however, to sell its securities to the public, but is instead restricted to direct transactions with the U.S. Treasury. Interest receivable on the securities is due within 6 months and is considered to be stated at its fair value.

Direct loans, Accounts receivable resulting from investment guaranties, and Assets Acquired in insurance Claims settle-ments: These assets are stated on the balance sheet at the present value of the amount expected to be realized. This value is based on management’s quarterly review of the portfolio and considers specific factors related to each individual receivable and its collateral. The stated value on the balance sheet is also management’s best estimate of fair value for these instruments.

borrowings from the u.s. treasury: The fair value of borrow-ings from the U.S. Treasury is estimated based on the face value of borrowings discounted over their term at year-end rates. These borrowings were required by the Federal Credit Reform Act, and repayment terms are fixed by the U.S. Treasury in ac-cordance with that Act.

investment guaranties Committed and outstanding: OPIC’s investment guaranties are intended to provide a means of mobilizing private capital in markets where private lenders would be unwilling to lend without the full faith and credit of the U.S.

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Government. Given the absence of a market for comparable instruments, OPIC determined that the fair value is the present value of future fees expected to be collected.

(14) oPErAtinG lEAsEOPIC negotiated a new building lease during fiscal year 2004. Under the lease terms, OPIC received interest-bearing tenant improvement allowances for space refurbishment. Total incentives offered by the lessor to cover these costs were $3.4 million. The value of these incentives is deferred in the balance sheet and is amortized to reduce rent expense on a straight-line basis over the 15-year life of the lease.

Rental expense for fiscal years 2009 and 2008 was approximately $4 million and $3.8 million, respectively. Minimum future rental payments under the 15-year lease at 1100 New York Avenue, N.W. are approximately $4.4 million annually, with additional adjust-ments tied to the consumer price index.

(15) PEnsionsOPIC’s permanent employees are covered by the Civil Service Retirement System (CSRS) or the Federal Employee Retirement System (FERS). For CSRS, OPIC withheld 7.0% of employees’ gross 2009 earnings and contributed 7.0% of employees’ 2009 gross earnings. The sums were transferred to the Civil Service Retirement Fund from which this employee group will receive retirement benefits.

For FERS, OPIC withheld 0.80% of employees’ gross earnings. OPIC transferred this sum to the FERS fund from which the em-ployee group will receive retirement benefits. An additional 6.2% of the FERS employees’ gross earnings is withheld, and that, plus matching contributions by OPIC, are sent to the Social Security System from which the FERS employee group will receive social security benefits. OPIC occasionally hires employees on temporary appointments, and those employees are covered by the social security system under which 6.2% of earnings is withheld and matched by OPIC.

FERS and CSRS employees may elect to participate in the Thrift Savings Plan (TSP). In January 2006 the TSP contributions limits were eliminated. In 2009 both CSRS and FERS employees could

elect to contribute up to $16,500, the IRS elective deferral limit for the tax year. FERS employees receive an automatic 1% contribution from OPIC. Amounts withheld for FERS employees are matched by OPIC, up to an additional 4%, for a total of 5%.

Although OPIC funds a portion of employee pension benefits under the CSRS, the FERS, and the TSP, and makes necessary payroll withholdings, it has no liability for future payments to employ-ees under these programs. Furthermore, separate information related to OPIC’s participation in these plans is not available for disclosure in the financial statements. Paying retirement benefits and reporting plan assets and actuarial information is the responsibility of the U.S. Office of Personnel Management and the Federal Retirement Thrift Investment Board, which administer these plans. Data regarding the CSRS and FERS actuarial present value of accumulated benefits, assets available for benefits, and unfunded pension liability are not allocated to individual depart-ments and agencies.

(16) concEntrAtion of risKOPIC is subject to certain risks associated with financial instru-ments not reflected in its balance sheet. These financial instru-ments include political risk insurance, loan guaranties, and committed-but-undisbursed direct loans.

With respect to political risk insurance, OPIC insures against currency inconvertibility, expropriation of assets, and political violence. Additionally, OPIC provides investment financing through direct loans and investment guaranties.

OPIC’s credit policy is to take a senior security position in the assets of the projects or transactions it guaranties. The nature and recoverable value of the collateral pledged to OPIC varies from transaction to transaction and may include tangible assets, cash collateral or equivalents, and/or a pledge of shares in the project company as well as personal and corporate guaranties. OPIC takes all necessary steps to protect its position in such collateral and retains the ability to enforce its rights as a secured lender if such action becomes necessary.

The following is a summary of OPIC’s off-balance-sheet risk at September 30, 2009 and 2008 (dollars in thousands):

2009 total outstanding unused commitmentsGuaranties $ 8,162,644 4,919,118 3,243,526Undisbursed direct loans 1,483,239 — 1,483,239Insurance 2,688,916 1,945,076 743,840

2008 Guaranties $ 7,081,511 4,731,719 2,349,792Undisbursed direct loans 453,076 — 453,076Insurance 2,921,905 2,245,473 676,432


OPIC’s off-balance-sheet finance and insurance exposure involves coverage outside of the United States. The following is a break-

down of such total commitments at September 30, 2009 by major geographical area (dollars in thousands):

loan undisbursed portion guaranties of direct loans insuranceAfrica $ 1,273,105 288,659 555,676Asia 385,472 106,450 501,703Europe 797,458 118,375 95,635Latin America 3,027,558 161,260 433,236Middle East 1,423,736 644,379 792,432NIS (New Independent States) 894,954 109,532 328,871Worldwide 360,361 54,584 —Insurance stop-loss adjustment — — (18,637) $ 8,162,644 1,483,239 2,688,916

OPIC has several client-specific contracts with stop-loss limits that are less than the aggregate coverage amounts. The insurance stop-loss adjustment represents the difference between the aggregate

coverage amount and OPIC’s actual exposure under these contracts. At September 30, 2009, OPIC’s largest finance and insurance expo-sure was in the following countries and sectors (dollars in thousands):

(17) otHEr continGEnciEsOPIC is currently involved in certain legal claims and has received notifications of potential claims in the normal course of business. There are substantial factual and legal issues that might bar any recovery in these matters. It is not possible to evaluate the likeli-hood of any unfavorable outcome, nor is it possible to estimate the amount of compensation, if any, that may be determined to be owed in the context of a settlement. Management believes that the resolution of these claims will not have a material adverse impact on OPIC.

(18) AccountinG And disclosurE rEquirE-MEnts for GuArAntiEsIn FY 2009 and FY 2008 pursuant to the requirement of FASB ASC 460, OPIC recognized a guaranty liability and a guaranty fee receivable of $234 million and $152.5 million, respectively. OPIC collected $63.9 million and $51 million of guaranty fees in FY 2009 and FY 2008, respectively, on the investment guaranties issued since December 31, 2002.

(19) stAtutory covEnAntsOPIC’s enabling statute stipulates both operating and financial requirements with which OPIC must comply. In management’s opinion, OPIC is in compliance with all such requirements.

CountryMexico $ 1,010,158Jordan 781,598Russia 658,235 Nigeria 626,168Turkey 610,076

sectorFinancial services $ 6,539,867Power generation 1,770,198Oil and gas services 1,406,255Services 1,025,851Manufacturing 751,574

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> made W/100% WIndPOWer

> uses sOy based InKs

C

OVerseas PrIVate InVestment COrPOratIOnan aGenCy Of the unIted states GOVernment

1100 neW yOrK aVenue, nW

WashInGtOn, dC 20527

202.336.8400

WWW.OPIC.GOV

annual report...2009 opic annual report page 4 guaranties and underwriting political risk insurance...

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